PRIOR PRINTER'S NO. 1269 PRINTER'S NO. 1473
No. 1032 Session of 1999
INTRODUCED BY GREENLEAF, LOEPER, MELLOW, HART, SALVATORE,
O'PAKE, FUMO, BELL, BOSCOLA, BRIGHTBILL, CONTI, CORMAN,
KUKOVICH, SCHWARTZ, THOMPSON, WENGER, WOZNIAK, LEMMOND AND
MOWERY, JUNE 18, 1999
SENATOR EARLL, URBAN AFFAIRS AND HOUSING, AS AMENDED,
NOVEMBER 8, 1999
AN ACT
1 Amending Title 68 (Real and Personal Property) of the
2 Pennsylvania Consolidated Statutes, relating to residential
3 real estate transfers; providing for disclosures by sellers
4 of residential real estate and for home inspections; and
5 making a repeal.
6 The General Assembly of the Commonwealth of Pennsylvania
7 hereby enacts as follows:
8 Section 1. Title 68 of the Pennsylvania Consolidated
9 Statutes is amended by adding a part to read:
10 PART III
11 RESIDENTIAL REAL PROPERTY
12 Chapter
13 71. General Provisions
14 73. Seller Disclosures
15 75. Home Inspections
16 CHAPTER 71
17 GENERAL PROVISIONS
18 Sec.
1 7101. Short title of part.
2 7102. Definitions.
3 7103. Application of part.
4 § 7101. Short title of part.
5 This part shall be known and may be cited as the Residential
6 Real Estate Transfers Law.
7 § 7102. Definitions.
8 Subject to additional definitions contained in subsequent
9 provisions of this part which are applicable to specific
10 provisions of this part, the following words and phrases when
11 used in this part shall have the meanings given to them in this
12 section unless the context clearly indicates otherwise:
13 "Agent." Any broker, associate broker or salesperson, as
14 defined in the act of February 19, 1980 (P.L.15, No.9), known as
15 the Real Estate Licensing and Registration Act.
16 "Agreement of transfer." A contract between a buyer and
17 seller setting forth the terms of a residential real estate
18 transfer.
19 "Buyer." Any person receiving any estate or interest in real
20 property in a transfer subject to this part.
21 "Commission." The State Real Estate Commission.
22 "Final settlement." The time at which the buyer and seller
23 have signed and delivered all papers and consideration necessary
24 to convey title to the estate or interest in real property being
25 conveyed.
26 "Material defect." A problem with a residential real
27 property or any portion of it that would have a significant
28 adverse impact on the value of the property or that involves an
29 unreasonable risk to people on the property. The fact that a
30 structural element, system or subsystem is near, at or beyond
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1 the end of the normal useful life of such a structural element,
2 system or subsystem is not by itself a material defect.
3 "Seller." Any person transferring any estate or interest in
4 residential real property in a transfer subject to this part.
5 § 7103. Application of part.
6 (a) General rule.--This part shall apply to and the term
7 "residential real estate transfer" when used in this part shall
8 mean a transfer of any interest in real property located within
9 this Commonwealth, other than a transfer described in subsection
10 (b), that consists of not less than one nor more than four
11 residential dwelling units, whether by sale, exchange,
12 installment sales contract, lease with an option to purchase,
13 grant or transfer of unit in a residential condominium or
14 cooperative.
15 (b) Exceptions.--This part shall not apply to a transfer:
16 (1) Pursuant to court order, including, but not limited
17 to, transfers ordered by a probate court in the
18 administration of an estate, transfers pursuant to a writ of
19 execution, transfers by a trustee in bankruptcy, transfers by
20 eminent domain and condemnation and transfers resulting from
21 a decree for specific performance.
22 (2) To a mortgagee by a mortgagor or successor in
23 interest who is in default; to a beneficiary of a deed of
24 trust by a trustee or successor in interest who is in
25 default; by any foreclosure sale after default in an
26 obligation secured by a mortgage; by a sale under a power of
27 sale or any foreclosure sale under a decree of foreclosure
28 after default in an obligation secured by a deed of trust or
29 secured by any other instrument containing a power of sale;
30 or by a mortgagee or a beneficiary under a deed of trust who
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1 has acquired the real property at a sale conducted pursuant
2 to a power of sale under a mortgage or deed of trust or a
3 sale pursuant to a decree of foreclosure or who has acquired
4 the real property by a deed in lieu of foreclosure.
5 (3) From one co-owner to one or more other co-owners.
6 (4) Made to a spouse or to a person or persons in the
7 lineal line of consanguinity of one or more of the
8 transferors.
9 (5) Between spouses resulting from a decree of
10 dissolution of marriage or a decree of legal separation or
11 from a property settlement agreement incidental to the
12 decree.
13 (6) By a corporation, partnership or other association
14 to its shareholders, partners or other equity owners in
15 connection with the liquidation of the corporation,
16 partnership or other association.
17 (7) Of a property to be converted by the buyer into a
18 use other than residential use or to be demolished.
19 (8) Of unimproved real property.
20 CHAPTER 73
21 SELLER DISCLOSURES
22 Sec.
23 7301. Short title of chapter.
24 7302. Application of chapter.
25 7303. Disclosure of material defects.
26 7304. Disclosure form.
27 7305. Delivery of disclosure form.
28 7306. Information unavailable to seller.
29 7307. Information subsequently rendered inaccurate.
30 7308. Affirmative duty of seller.
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1 7309. Nonliability of seller.
2 7310. Nonliability of agent.
3 7311. Failure to comply.
4 7312. Amendment of disclosure.
5 7313. Specification of items for disclosure no limitation on
6 other disclosure obligations.
7 7314. Cause of action.
8 7315. Preemption of local requirements.
9 § 7301. Short title of chapter.
10 This chapter shall be known and may be cited as the Real
11 Estate Seller Disclosure Law.
12 § 7302. Application of chapter.
13 (a) General rule.--This chapter shall apply to all
14 residential real estate transfers, except the following:
15 (1) Transfers by a fiduciary in the course of the
16 administration of a decedent's estate, guardianship,
17 conservatorship or trust.
18 (2) Transfers of new residential construction that has
19 not been previously occupied when:
20 (i) the buyer has received a one-year or longer
21 written warranty covering such construction;
22 (ii) the dwelling has been inspected for compliance
23 with the applicable building code or, if there is no
24 applicable code, for compliance with a nationally
25 recognized model building code; and
26 (iii) a certificate of occupancy or a certificate of
27 code compliance has been issued for the dwelling.
28 (b) Limitations in the case of condominiums or
29 cooperatives.--Any seller of a unit in a condominium created
30 under Subpart B of Part II (relating to condominiums) or a
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1 similar provision of prior law or a cooperative as defined in
2 section 4103 (relating to definitions) shall be obligated to
3 make disclosures under this chapter only with respect to the
4 seller's own unit and shall not be obligated by this chapter to
5 make any disclosure with respect to any common elements or
6 common facilities of the condominium or cooperative. The
7 provisions of section 3407 (relating to resales of units) shall
8 control disclosures a seller is required to make concerning
9 common elements in a condominium, and section 4409 (relating to
10 resales of cooperative interests) shall control disclosures a
11 seller is required to make concerning common elements in a
12 cooperative.
13 § 7303. Disclosure of material defects.
14 Any seller who intends to transfer any interest in real
15 property shall disclose to the buyer any material defects with
16 the property known to the seller by completing all applicable
17 items in a property disclosure statement in the form required by
18 section 7304 (relating to disclosure form). A signed and dated
19 copy of the property disclosure statement shall be delivered to
20 the buyer in accordance with section 7305 (relating to delivery
21 of disclosure form) prior to the signing of an agreement of
22 transfer by the seller and buyer with respect to the property.
23 § 7304. Disclosure form.
24 (a) General rule.--The disclosures required by this chapter
25 pertaining to the property proposed to be transferred shall be
26 made on a form of property disclosure statement prescribed by
27 the State Real Estate Commission. Nothing in this chapter shall
28 preclude a seller from including in a property disclosure
29 statement additional provisions that require greater specificity
30 or that call for the disclosure of the condition or existence of
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1 other features of the property.
2 (b) Contents of property disclosure statement.--A form of
3 property disclosure statement promulgated by the State Real
4 Estate Commission shall call for disclosures with respect to all
5 of the following subjects:
6 (1) Seller's expertise in contracting, engineering,
7 architecture or other areas related to the construction and
8 conditions of the property and its improvements.
9 (2) When the property was last occupied by the seller.
10 (3) Roof.
11 (4) Basements and crawl spaces.
12 (5) Termites/wood destroying insects, dry rot and pests.
13 (6) Structural problems.
14 (7) Additions, remodeling and structural changes to the
15 property.
16 (8) Water and sewage systems or service.
17 (9) Plumbing system.
18 (10) Heating and air conditioning.
19 (11) Electrical system.
20 (12) Other equipment and appliances included in the
21 sale.
22 (13) Soils, drainage and boundaries.
23 (14) Presence of hazardous substances.
24 (15) Condominiums and other homeowners associations.
25 (16) Legal issues affecting title or that would
26 interfere with use and enjoyment of the property.
27 (c) Transitional rule.--Until a form of property disclosure
28 statement has been promulgated by the commission, the form
29 prescribed under the act of July 2, 1996 (P.L.500, No.84), known
30 as the Real Estate Seller Disclosure Act, shall continue to be
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1 used by sellers.
2 § 7305. Delivery of disclosure form.
3 (a) Method of delivery.--The seller shall deliver the
4 property disclosure statement to the buyer by personal delivery;
5 ordinary mail; certified mail, return receipt requested; or
6 facsimile transmission to the buyer or the buyer's agent.
7 (b) Parties to whom delivered.--For purposes of this
8 chapter, delivery to one prospective buyer or buyer's agent is
9 deemed delivery to all persons intending to take title as co-
10 tenants, joint tenants or as a tenant by the entireties with the
11 buyer. Receipt may be acknowledged on the statement, in an
12 agreement of transfer for the residential real property or shown
13 in any other verifiable manner.
14 § 7306. Information unavailable to seller.
15 If at the time the disclosures are required to be made, an
16 item of information required to be disclosed is unknown or not
17 available to the seller, the seller may make a disclosure based
18 on the best information available to the seller.
19 § 7307. Information subsequently rendered inaccurate.
20 If information disclosed in accordance with this chapter is
21 subsequently rendered inaccurate prior to final settlement as a
22 result of any act, occurrence or agreement subsequent to the
23 delivery of the required disclosures, the seller shall notify
24 the buyer of the inaccuracy.
25 § 7308. Affirmative duty of seller.
26 The seller is not obligated by this chapter to make any
27 specific investigation or inquiry in an effort to complete the
28 property disclosure statement. In completing the property
29 disclosure statement, the seller shall not make any
30 representations that the seller or the agent for the seller
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1 knows or has reason to know are false, deceptive or misleading
2 and shall not fail to disclose a known material defect.
3 § 7309. Nonliability of seller.
4 (a) General rule.--A seller shall not be liable for any
5 error, inaccuracy or omission of any information delivered
6 pursuant to this chapter if:
7 (1) the seller had no knowledge of the error, inaccuracy
8 or omission;
9 (2) the error, inaccuracy or omission was based on a
10 reasonable belief that a material defect or other matter not
11 disclosed had been corrected; or
12 (3) the error, inaccuracy or omission was based on
13 information provided by a public agency, home inspector,
14 contractor or person registered or licensed under an act
15 referred to in section 7503(a) (relating to relationship to
16 other laws) about matters within the scope of the agency's
17 jurisdiction or such other person's occupation and the seller
18 had no knowledge of the error, inaccuracy or omission.
19 (b) Delivery of information by public agency.--The delivery
20 of any information required to be disclosed by this chapter to a
21 prospective buyer by a public agency or other person providing
22 information required to be disclosed under this chapter shall be
23 deemed to comply with the requirements of this chapter and shall
24 relieve the seller or the agent of the seller from any further
25 duty under this chapter with respect to that item of
26 information.
27 (c) Report by expert.--The delivery of a report or opinion
28 prepared by a home inspector, contractor or person registered or
29 licensed under an act referred to in section 7503(a) dealing
30 with matters within the scope of the person's registration,
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1 license or expertise shall be sufficient compliance for
2 application of the exemption provided under subsection (a)(3) if
3 the information is provided to the prospective buyer in writing.
4 § 7310. Nonliability of agent.
5 An agent of a seller or a buyer shall not be liable for any
6 violation of this chapter unless the agent had actual knowledge
7 of a material defect that was not disclosed to the buyer or of a
8 misrepresentation relating to a material defect.
9 § 7311. Failure to comply.
10 (a) General rule.--A residential real estate transfer
11 subject to this chapter shall not be invalidated solely because
12 of the failure of any person to comply with any provision of
13 this chapter. However, any person who willfully or negligently
14 violates or fails to perform any duty prescribed by any
15 provision of this chapter shall be liable in the amount of
16 actual damages suffered by the buyer as a result of a violation
17 of this chapter. This subsection shall not be construed so as to
18 restrict or expand the authority of a court to impose punitive
19 damages or apply other remedies applicable under any other
20 provision of law.
21 (b) Statute of limitations.--An action for damages as a
22 result of a violation of this chapter must be commenced within
23 two years after the date of final settlement.
24 § 7312. Amendment of disclosure.
25 Any disclosure made pursuant to this chapter may be amended
26 in writing by the seller prior to the signing of an agreement of
27 transfer by the seller and buyer.
28 § 7313. Specification of items for disclosure no limitation on
29 other disclosure obligations.
30 (a) General rule.--The specification of items for disclosure
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1 in this chapter or in any form of property disclosure statement
2 prescribed by the State Real Estate Commission does not limit or
3 abridge any obligation for disclosure created by any other
4 provision of law or that may exist in order to avoid fraud,
5 misrepresentation or deceit in the transaction.
6 (b) Responsibility of licensee.--Nothing in this chapter
7 shall abrogate or diminish the responsibility of a licensee
8 under the act of February 19, 1980 (P.L.15, No.9), known as the
9 Real Estate Licensing and Registration Act.
10 (c) Duty to provide form.--An agent representing a seller
11 must advise a seller of the seller's responsibilities under this
12 chapter and must provide the seller with a copy of the form of
13 property disclosure statement.
14 § 7314. Cause of action.
15 A buyer shall not have a cause of action under this chapter
16 against the seller or the agent for either or both of the seller
17 or the buyer for:
18 (1) material defects to the property disclosed to the
19 buyer prior to the signing of an agreement of transfer by the
20 seller and buyer;
21 (2) material defects that develop after the signing of
22 the agreement of transfer by the seller and buyer; or
23 (3) material defects that occur after final settlement.
24 § 7315. Preemption of local requirements.
25 A (A) GENERAL RULE.--EXCEPT AS PROVIDED IN SUBSECTION (B), A <--
26 municipality or local authority shall not have the power to
27 mandate that:
28 (1) a seller or an agent of either or both the seller
29 and the buyer make any particular disclosures to the buyer in
30 connection with a residential real estate transfer; or
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1 (2) provisions on any particular subject be included in
2 an agreement of transfer.
3 (B) EXCEPTION.--SUBSECTION (A) SHALL NOT APPLY TO AN <--
4 ORDINANCE OR REGULATION ADOPTED BY A MUNICIPALITY OR LOCAL
5 AUTHORITY BEFORE THE EFFECTIVE DATE OF THIS SECTION AND SUCH AN
6 ORDINANCE OR REGULATION SHALL CONTINUE IN FULL FORCE AND EFFECT,
7 EXCEPT THAT THE MUNICIPALITY OR LOCAL AUTHORITY SHALL NOT HAVE
8 THE POWER AFTER THAT DATE TO AMEND THE ORDINANCE OR REGULATION
9 IN A MANNER THAT:
10 (1) IMPOSES NEW OR EXPANDED DISCLOSURE REQUIREMENTS;
11 (2) INCREASES THE SCOPE OF ANY PROVISION THAT MUST BE
12 INCLUDED IN AN AGREEMENT OF TRANSFER; OR
13 (3) IMPOSES NEW REQUIREMENTS ON ANY AGENT, BUYER OR
14 SELLER INVOLVED IN A RESIDENTIAL REAL ESTATE TRANSFER.
15 CHAPTER 75
16 HOME INSPECTIONS
17 Sec.
18 7501. Short title of chapter.
19 7502. Definitions and index of definitions.
20 7503. Relationship to other laws.
21 7504. Duty of care of home inspectors.
22 7505. Prohibited acts by home inspectors.
23 7506. Contractual provisions regarding home inspections.
24 7507. Contracts with home inspectors.
25 7508. Home inspection reports.
26 7509. Liability insurance.
27 7510. Penalty. 7510. PENALTIES. <--
28 7511. Statute of limitations.
29 § 7501. Short title of chapter.
30 This chapter shall be known and may be cited as the Home
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1 Inspection Law.
2 § 7502. Definitions and index of definitions.
3 (a) Definitions.--The following words and phrases when used
4 in this chapter shall have the meanings given to them in this
5 section unless the context clearly indicates otherwise:
6 "Home inspection." A noninvasive, visual examination of some
7 combination of the mechanical, electrical or plumbing systems or
8 the structural and essential components of a residential
9 dwelling designed to identify material defects in those systems
10 and components, and performed for a fee in connection with or
11 preparation for a proposed or possible residential real estate
12 transfer. The term also includes any consultation regarding the
13 property that is represented to be a home inspection or that is
14 described by any confusingly similar term. The term does not
15 include an examination of a single system or component of a
16 residential dwelling such as, for example, its electrical or
17 plumbing system or its roof. THE TERM ALSO DOES NOT INCLUDE AN <--
18 EXAMINATION THAT IS LIMITED TO INSPECTION FOR, OR OF, ONE OR
19 MORE OF THE FOLLOWING: WOOD DESTROYING INSECTS, UNDERGROUND
20 TANKS AND WELLS, SEPTIC SYSTEMS, SWIMMING POOLS AND SPAS, ALARM
21 SYSTEMS, AIR AND WATER QUALITY, TENNIS COURTS AND PLAYGROUND
22 EQUIPMENT, POLLUTANTS, TOXIC CHEMICALS AND ENVIRONMENTAL
23 HAZARDS.
24 "Home inspection report." A written report on the results of
25 a home inspection.
26 "Home inspector." An individual who performs a home
27 inspection.
28 "National home inspectors association." Any national trade <--
29 association of home inspectors that:
30 (1) Is operated on a not-for-profit basis and is not
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1 operated as a franchise.
2 (2) Has members in more than ten states.
3 (3) Requires that a person may not become a full member
4 unless the person has performed or participated in more than
5 100 home inspections and has passed a recognized or
6 accredited examination testing knowledge of the proper
7 procedures for conducting a home inspection.
8 (4) Requires that its members comply with a code of
9 conduct and attend continuing professional education classes
10 as an ongoing condition of membership.
11 (b) Index of other definitions.--The following is a
12 nonexclusive list of other definitions applying to this chapter
13 and the sections in which they appear:
14 "Agent." Section 7102 (relating to definitions).
15 "Agreement of transfer." Section 7102 (relating to
16 definitions).
17 "Buyer." Section 7102 (relating to definitions).
18 "MATERIAL DEFECT." SECTION 7102 (RELATING TO DEFINITIONS). <--
19 "Residential real estate transfer." Section 7103 (relating
20 to application of part).
21 "Seller." Section 7102 (relating to definitions).
22 § 7503. Relationship to other laws.
23 (a) General rule.--Nothing in this chapter shall be
24 construed to allow a home inspector who is not registered or
25 licensed under one or more of the following laws from performing
26 any activity that would constitute the practice of the
27 profession regulated by that law:
28 (1) The act of May 23, 1945 (P.L.913, No.367), known as
29 the Engineer, Land Surveyor and Geologist Registration Law.
30 (2) The act of January 24, 1966 (1965 P.L.1535, No.537),
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1 known as the Pennsylvania Sewage Facilities Act.
2 (3) The act of March 1, 1974 (P.L.90, No.24), known as
3 the Pennsylvania Pesticide Control Act of 1973.
4 (4) The act of December 14, 1982 (P.L.1227, No.281),
5 known as the Architects Licensure Law.
6 (5) The act of July 9, 1987 (P.L.238, No.43), known as
7 the Radon Certification Act.
8 (6) The act of July 10, 1990 (P.L.404, No.98), known as
9 the Real Estate Appraisers Certification Act.
10 (b) Exclusions.--This chapter shall not:
11 (1) Apply to a person registered or licensed under an
12 act referred to in subsection (a) when acting pursuant to his
13 registration or license.
14 (2) Apply to an officer or employee of a municipality or
15 local authority when acting in his official capacity.
16 (3) Affect the obligations or immunities of a person
17 licensed under the act of February 19, 1980 (P.L.15, No.9),
18 known as the Real Estate Licensing and Registration Act, that
19 are imposed or provided by that act or Chapter 73 (relating
20 to seller disclosures) when the person is acting pursuant to
21 his license.
22 § 7504. Duty of care of home inspectors.
23 (a) General rule.--It is the duty of a home inspector to
24 conduct a home inspection with the degree of care that a
25 reasonably prudent home inspector would exercise.
26 (b) Standard.--In ascertaining the degree of care that would
27 be exercised by a reasonably prudent home inspector, the court
28 may SHALL consider the standards of practice and codes of ethics <--
29 of national home inspector associations.
30 § 7505. Prohibited acts by home inspectors.
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1 (a) General rule.--Any of the following acts engaged in by a
2 home inspector, an employer of a home inspector or another
3 business or person that controls or has a financial interest in
4 the employer of a home inspector shall be deemed to be an unfair
5 or deceptive act or practice as defined by section 2(4)(i)
6 through (xxi) of the act of December 17, 1968 (P.L.1224,
7 No.387), known as the Unfair Trade Practices and Consumer
8 Protection Law:
9 (1) Performing or offering to perform for an additional
10 fee any repairs to a structure with respect to which the home
11 inspector, the employer of the home inspector or such other
12 business or person has prepared a home inspection report
13 within the preceding 12 months, EXCEPT THAT THIS PARAGRAPH <--
14 SHALL NOT APPLY TO REMEDIATION FOR RADON OR WOOD DESTROYING
15 INSECTS.
16 (2) Inspecting for a fee any property in which the home
17 inspector, the employer of the home inspector or such other
18 business or person has any financial interest or any interest
19 in the transfer of the property, including without limitation
20 receipt of a commission as an agent, unless the financial
21 interest or interest in the transfer of the property is
22 disclosed in writing to the buyer before the home inspection
23 is performed and the buyer signs an acknowledgment of receipt
24 of the disclosure.
25 (3) Offering or delivering any compensation, commission, <--
26 inducement or reward, or any combination of the foregoing,
27 having a total value of more than $100 during any one-year
28 period, COMMISSION, REFERRAL FEE OR KICKBACK to the seller of <--
29 the inspected property or to an agent for either or both of
30 the seller and the buyer for the referral of any business to
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1 the home inspector, the employer of the home inspector or
2 such other business or person. It is not a violation of this <--
3 paragraph for a home inspector to carry insurance that
4 provides coverage for a seller or agent.
5 (4) Accepting an engagement to perform a home inspection
6 or to prepare a home inspection report in which the
7 employment itself or the fee payable for the inspection is
8 contingent upon the conclusions in the report, preestablished
9 or prescribed findings or the closing of the transaction.
10 (b) Exception.--A home warranty company that is affiliated
11 with or retains the home inspector does not violate this section
12 if the home warranty company performs repairs pursuant to claims
13 made under a home warranty contract.
14 (c) Remedies.--In addition to any other remedies available
15 under the Unfair Trade Practices and Consumer Protection Law or
16 other applicable provision of law, the owner of a property on
17 which repairs are performed in violation of subsection (a)(1)
18 shall be entitled to a full refund of any moneys paid for those
19 repairs and any promissory note or other obligation to pay given
20 to the person performing those repairs shall be void.
21 § 7506. Contractual provisions regarding home inspections.
22 (a) General rule.--A provision of an agreement of transfer
23 regarding the right of the buyer to obtain a home inspection
24 report and providing for the consequences, if any, to the
25 parties based on the results of the report shall not be
26 enforceable unless it requires that the home inspection be
27 performed by a full member in good standing of a national home
28 inspection association in accordance with the ethical standards
29 and code of conduct or practice of that association. A home
30 inspection performed by a person who has not attained full
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1 membership in a national home inspection association satisfies
2 the requirements of this subsection if the person is supervised
3 by a full member in good standing of a national home inspection
4 association who employs the person. AGREES TO BE RESPONSIBLE FOR <--
5 THE HOME INSPECTION REPORT BY SIGNING THE REPORT.
6 (b) Reliance.--A buyer shall be entitled to rely in good
7 faith, without independent investigation, on a written
8 representation by a home inspector that the home inspector is a
9 FULL member in good standing of a national home inspection <--
10 association.
11 § 7507. Contracts with home inspectors.
12 (A) PROHIBITED PROVISIONS.--The following types of <--
13 provisions in a contract with a home inspector for the
14 performance of a home inspection are contrary to public policy
15 and shall be void:
16 (1) a limitation on the liability of the home inspector
17 to the cost of the home inspection report or any other amount <--
18 in cases where the home inspector has been grossly negligent
19 or reckless or engaged in willful misconduct; FOR GROSS <--
20 NEGLIGENCE OR WILLFUL MISCONDUCT;
21 (2) a waiver or modification of any provision of this
22 chapter.
23 (B) SCOPE OF INSPECTION.--THE SCOPE OF A HOME INSPECTION, <--
24 THE SERVICES TO BE PERFORMED AND THE SYSTEMS AND CONDITIONS TO
25 BE INSPECTED OR EXCLUDED FROM INSPECTION MAY BE DEFINED BY A
26 CONTRACT BETWEEN THE HOME INSPECTOR AND THE CLIENT.
27 § 7508. Home inspection reports.
28 (a) Required contents.--A home inspection report must be in
29 writing and shall include:
30 (1) A description of the scope of the inspection,
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1 including without limitation an identification of the
2 structural elements, systems and subsystems covered by the
3 report.
4 (2) A description of any MATERIAL defects noted during <--
5 the inspection, along with any recommendation that certain
6 experts be retained to determine the extent of the defects
7 and any corrective action that should be taken. A "material
8 defect" as defined in section 7102 (relating to definitions)
9 that poses an unreasonable risk to people on the property
10 shall be conspicuously identified as such.
11 (3) The following statements, set forth conspicuously:
12 "A home inspection is intended to assist in
13 evaluation of the overall condition of the dwelling. The
14 inspection is based on observation of the visible and
15 apparent condition of the structure and its components on
16 the date of inspection."
17 "The results of this home inspection are not intended
18 to make any representation regarding the presence or
19 absence of latent or concealed defects that are not
20 reasonably ascertainable in a competently performed home
21 inspection. No warranty or guaranty is expressed or
22 implied."
23 "If the person conducting your home inspection is not
24 a licensed structural engineer or other professional
25 whose license authorizes the rendering of an opinion as
26 to the structural integrity of a building or its other
27 component parts, you may be advised to seek a
28 professional opinion as to any defects or concerns
29 mentioned in the report."
30 (b) Confidentiality.--Except as otherwise required by law, a
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1 home inspector shall not deliver a home inspection report to any
2 person other than the client of the home inspector without the
3 client's consent. The seller shall have the right, upon request,
4 to receive without charge a copy of a home inspection report
5 from the person for whom it was prepared.
6 (c) Repair estimates prohibited.--A home inspector shall not
7 express either orally or in writing an opinion regarding <--
8 ESTIMATE OF the cost to repair any defect found during a home <--
9 inspection, EXCEPT THAT SUCH AN ESTIMATE MAY BE INCLUDED IN A <--
10 HOME INSPECTION REPORT IF:
11 (1) THE REPORT IDENTIFIES THE SOURCE OF THE ESTIMATE;
12 (2) THE ESTIMATE IS STATED AS A RANGE OF COSTS; AND
13 (3) THE REPORT STATES THAT THE PARTIES SHOULD CONSIDER
14 OBTAINING AN ESTIMATE FROM A CONTRACTOR WHO PERFORMS THE TYPE
15 OF REPAIR INVOLVED.
16 § 7509. Liability insurance.
17 (a) Required insurance.--A home inspector shall maintain
18 liability insurance with coverage in the amount of at least <--
19 $500,000 for errors and omissions in the performance of a home
20 inspection. INSURANCE AGAINST ERRORS AND OMISSIONS IN THE <--
21 PERFORMANCE OF A HOME INSPECTION AND GENERAL LIABILITY, WITH
22 COVERAGES OF NOT LESS THAN $100,000 PER OCCURRENCE AND $500,000
23 IN THE AGGREGATE AND WITH DEDUCTIBLES OF NOT MORE THAN $2,500.
24 (b) Term.--
25 (1) Except as set forth in paragraph (2), a home
26 inspector shall maintain insurance under subsection (a) for
27 at least one year after the latest home inspection report the
28 home inspector delivers.
29 (2) Paragraph (1) shall not apply to a home inspection
30 report that was delivered prior to (the Legislative Reference
19990S1032B1473 - 20 -
1 Bureau shall insert here the effective date of this act).
2 § 7510. Penalty PENALTIES. <--
3 A person who violates section 7508(a)(1), (3), (b) or (c) <--
4 (relating to home inspection reports) or
5 (A) CRIMINAL PENALTY.--A PERSON WHO VIOLATES SECTION 7509 <--
6 (relating to liability insurance) or who provides a false
7 representation under section 7506(b) (relating to contractual
8 provisions regarding home inspections) commits a summary offense
9 and upon conviction thereof for a first offense shall be
10 sentenced to pay a fine not exceeding $500 or to imprisonment
11 for not more than three months, or both, and for a second or
12 subsequent offense commits a felony of the third degree and upon
13 conviction thereof shall be sentenced to pay a fine of not less
14 than $2,000 but not more than $5,000 or to imprisonment for not
15 less than one year but not more than two years, or both.
16 (B) FINE.--A PERSON WHO VIOLATES ANY PROVISION OF SECTION <--
17 7508 (RELATING TO HOME INSPECTION REPORTS) SHALL, UPON
18 CONVICTION IN A SUMMARY PROCEEDING BEFORE A DISTRICT JUSTICE, BE
19 SENTENCED TO PAY A FINE NOT EXCEEDING $500 AND, IN DEFAULT OF
20 PAYMENT OF SUCH FINE AND COSTS, BE IMPRISONED IN THE COUNTY JAIL
21 ONE DAY FOR EACH $50 OF FINE AND COSTS UNPAID.
22 § 7511. Statute of limitations.
23 An action to recover damages arising from a home inspection
24 report must be commenced within one year after the date the
25 report is delivered.
26 Section 2. The act of July 2, 1996 (P.L.500, No.84), known
27 as the Real Estate Seller Disclosure Act, is repealed.
28 Section 3. This act shall take effect in one year.
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